MEDIA FRENZY; How Much Profit Is Lurking in That Cellphone?

By RICHARD SIKLOS

Published: March 5, 2006

IN some ways, wireless is the new China. Both are huge, largely untapped markets for news and entertainment media companies. And media executives have made a lot of dreamy statements about both of these markets and funneled a lot of effort into them. Yet neither has yet translated into a significant new businesses for established companies, which are feverishly seeking ways to grow in a world of technological and competitive obstacles.

While China's media moment seems eternally right around the corner, mobile may be approaching its own at last -- it may just take a lot longer and be less earth-shaking than the recent hoopla may suggest. Last week, there were announcements of three ventures by media companies looking to insinuate themselves into the hip pockets of teenagers and their elders. All three are part of a deluge of wireless moves and offer glimpses at new ways of both distributing existing products and using big-media power to start new businesses.

In one of the deals unveiled last week, the MTV Networks unit of Viacom said it would sell mobile versions of its MTV, VH1, CMT and Comedy Central channels to Sprint customers; the services will include video clips from shows including ''The Daily Show With Jon Stewart.''

The most intriguing announcement came from a tentacle of the News Corporation, in the form of Mobizzo, which is essentially a kind of online studio and store for selling games, ring tones and adornments for mobile handsets.

CBS, meanwhile, which is perhaps best known for its notably unhip television network, plans to start a venture along the lines of Mobizzo in a few weeks. For now, CBS unveiled a plan to sell multimedia message alerts nationwide that will play short video clips on some cellphones. In a way, CBS aims to show that it wants to compete in this arena along with MTV, NBC and ESPN -- rivals that have been making their content available across a range of new mobile formats and gizmos.

What is significant about the News Corporation and CBS announcements is that both companies plan to sell their new services directly to consumers. Instead of buying these services through a mobile phone carrier, users can go directly to Web sites or can send text messages to an address that will instantly sign them up for, say, a ''Napoleon Dynamite'' wallpaper that they can use to amuse themselves and their friends. In the case of CBS's new service, users can sign up to pay 99 cents a month for news alerts from CBS News, and $3.99 for alerts from the syndicated program ''Entertainment Tonight.''

For media companies, direct selling is just one advantage that mobile technologies have over other forms of distributing information and entertainment, including the Internet.

Another is that young consumers, in particular, have come to view their mobile phones as fashion accessories, giving rise to a whole new category of personal media products, such as ring tones and avatars, which are animated images of oneself that are sent to friends with messages. (If you have to ask what these are, you probably don't need one.)

A third advantage is that anything bought through a mobile phone -- even if not purchased through your service provider itself -- can be automatically added to your monthly phone statement, avoiding the bother of having to enter a credit card number.

Add them up and these features illustrate why mobile media could be a big deal: they turn consumption into both a fashion statement and an impulse purchase, while further letting the genie of what-I-want-when-I-want-it out of the bottle.

This has proved to be the case in other countries that have more advanced mobile networks. Much has been made, for instance, about how the United States' mobile market compares with markets in places like South Korea -- where users enjoy all sorts of interactive features and pristine television signals on their handsets -- and how wireless carriers here have invested some $10 billion to catch up quickly. It's only understandable that established media companies, as well as the Internet titans Google and Yahoo, want to try to capture everything from the growth of the ring tone and games markets to emerging forms of mobile advertising.

The nagging question about all the activity around mobile -- the China factor, you might say -- is whether the United States will embrace these new products the way other nations have.

As for the China analogy, think about this: A conventional view among American media executives is that if the Chinese government would only allow a truly progressive market for information and ideas (with attendant copyright protections), foreign media companies would flourish.

But that assumes that China has a latent entertainment consumption culture as powerful as the one that drives the United States economy, and that its citizens' tastes are very similar to those of Americans.

It is absurd that only 20 new Hollywood movies are allowed into China's theaters each year. Yet even if audiences there could legitimately go to a theater to watch ''Brokeback Mountain,'' ''Munich'' and the other contenders for tonight's Academy Awards, they might not be as interested in doing so as both the censors in Beijing and the moguls in New York would like to think.

Similarly, it would be prudent to temper expectations about the prospects for wireless media in the United States -- especially until it becomes clear how much people are willing to spend on these newfangled services and the fancy phones needed to use them.

CONSIDER a survey, released last week by the banking firm RBC Capital Markets, of nearly 1,000 people aged 21 to 65. When asked to respond ''true'' or ''false'' to the statement ''There are many new and cool wireless products coming on the market that I am eager to purchase,'' 71 percent said ''false.'' And when asked to respond to ''I am not interested in watching TV programs or movies on my handheld device,'' 76 percent said ''true.''

Of course, even if this view of consumer desires proves accurate in the short term, there is plenty of business to be done selling new and cool wireless products for 20-odd percent of the 200 million cellphones currently in use nationwide.

And surveys about nascent products don't always tell the whole story. Most people probably didn't sit around thinking that they wanted to watch video clips on their computers or send instant messages to one another until these services hit critical mass.

For now, though, it seems premature to set the buzz for wireless at anything but the low setting.